Highlights From Sam Zell's Bloomberg Interview On Coronavirus Economy: 'Extraordinary Shock'

Sam Zell expects the coronavirus pandemic to have a similar impact on the economy and society as a whole as the Great Depression, the billionaire real estate guru said on a Bloomberg TV interview.

Consumer Sentiment 'Permanently Scarred'

Most people who lived through the Great Depression carried with them the many difficulties, including the feeling of hunger and desperation, Zell said.

The coronavirus will likely be no different, as a generation of people will feel the "extraordinary shock" of the pandemic and become "permanently scarred by having lived through this," he said. 

A return to prior social practices — even after the pandemic comes to an end — is unlikely to occur, he said.

Some form of social distancing will remain in place, and the retail, hospitality, travel, entertainment and sports industries will struggle for years to come, Zell said, adding that expectations for a quick "V-shape" recovery are unrealistic.

"The fact that these places may be open doesn't necessarily mean that they'll be doing business."

What To Buy: 'Nothing'

Zell is in no hurry to buy real estate assets for the simple reason that there is a large dislocation between buyers and sellers, he said.

Many real estate sellers "still remember" the price they could have commanded just eight weeks ago, while buyers expect "significant" discounts.

"When you've got that big a spread, nothing happens," he said.

Zell said his existing holdings are mixed. Activity at a bridge that connects California with the Tijuana International Airport in Mexico is down 90%. But the impact at the U.S. hospital chain Ardent Health Services is "almost unfelt," he said. 

Equity Residential EQR, the largest apartment operator in the U.S., is holding well enough in terms of rent payments, Zell said, adding that he doesn't expect to see any significant changes in monthly collections.

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